Endeavor Acquisition (AMEX:EDA.U)
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Endeavor Acquisition Corp. and American Apparel, Inc. confirm that the
special meeting of the stockholders of Endeavor to vote on the proposed
acquisition of American Apparel, Inc. and affiliated companies will be
held at 10:00 a.m. on Wednesday, December 12, 2007. If the transaction
is approved by Endeavor's stockholders, Endeavor and American Apparel
plan to complete the acquisition and related transactions promptly
following the meeting.
In connection with the closing of the acquisition, Endeavor will issue
approximately 37.3 million shares to one of American Apparel’s
stockholders, Dov Charney, and pay cash of approximately $67.9 million
to the other stockholder. Approximately 8 million Endeavor shares issued
in the transaction will be placed in escrow as a fund for any
indemnification rights Endeavor may have in connection with the
transaction. $2.5 million aggregate amount of cash bonuses also will be
paid to certain current American Apparel employees. American Apparel
also will repay certain insider loans as described in the definitive
proxy statement, dated November 28, 2007. Immediately prior to closing,
American Apparel will distribute an aggregate of approximately $15.8
million to American Apparel, Inc.’s existing
stockholders in connection with their personal income tax
responsibilities for 2006 and for 2007 through the date of closing. In
the notes to the pro forma financial information contained in the
definitive proxy statement, the company stated that, as of September 30,
2007, the amount owed for such distribution was $3.917 million. When
this amount was recalculated under the applicable terms of the
acquisition agreement, it was determined to be $13.5 million as of
September 30, 2007, which amount is included in the aforementioned $15.8
million aggregate distribution. In addition, such $15.8 million
aggregate distribution includes amounts to be distributed with respect
to income earned after September 30, 2007.
As previously noted in the definitive proxy statement, from time to time
American Apparel has failed to meet certain provisions of its credit
facility agreements and term loan agreement. American Apparel is seeking
the consent of its lenders to the amended terms of the acquisition
transaction with Endeavor, as noted in the definitive proxy statement,
and also may be required to obtain a waiver for any technical defaults
resulting from American Apparel’s recent
execution of an agreement to purchase certain production assets in an
immaterial transaction and from any other action taken in connection
with the closing of the transaction. American Apparel has historically
been able to obtain necessary waivers and modifications and expects to
receive them for these events, however, it may not be able to obtain
them prior to the closing of the business combination. If American
Apparel is unable to receive any necessary waivers or consents,
additional fees could be assessed against American Apparel or the
payment of its outstanding debt could be accelerated, which could
adversely affect the ability of American Apparel to continue operations.
If this should occur, the substantial majority of American Apparel’s
long term indebtedness would be recharacterized as short-term
indebtedness to reflect the acceleration of such debt.
Disclaimer
This communication is being made in respect of the proposed acquisition
of American Apparel and related companies. Endeavor has filed a
definitive proxy statement with the United States Securities and
Exchange Commission (the "SEC") relating to the proposed action, a copy
of which has been mailed to Endeavor's stockholders. BEFORE MAKING ANY
VOTING DECISION, ENDEAVOR'S STOCKHOLDERS ARE URGED TO READ THE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED BY ENDEAVOR WITH THE
SEC REGARDING THE ACQUISITION CAREFULLY AND IN THEIR ENTIRETY BECAUSE
THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION.
Endeavor's stockholders may obtain, without charge, a copy of the proxy
statement and other relevant documents filed with the SEC from the SEC's
website at www.sec.gov. Endeavor's
stockholders may obtain, without charge, a copy of the proxy statement
and other relevant documents filed with the SEC, including Endeavor’s
final prospectus for its initial public offering, by directing a request
by mail or telephone to Endeavor Acquisition Corp., 590 Madison Avenue,
21st floor, New York, New York, 212-683-5350.
About American Apparel
American Apparel is a vertically-integrated manufacturer, distributor,
and retailer of branded fashion basic apparel based in downtown Los
Angeles, California. As of October 31, 2007, American Apparel employed
over 6,000 people and operated 166 retail stores in 13 countries,
including the United States, Canada, Mexico, England, Germany, France,
Italy, the Netherlands, Sweden, Switzerland, Israel, Japan and South
Korea. American Apparel also operates a leading wholesale business that
supplies t-shirts and other casual wear to distributors and screen
printers. In addition to its retail stores and wholesale operations,
American Apparel operates an online retail e-commerce website.
About Endeavor Acquisition Corp.
Endeavor Acquisition Corp. (AMEX: EDA) (AMEX: EDA-WT) (AMEX: EDA-U) is a
specified purpose acquisition company formed for the purpose of
effecting a merger, capital stock exchange, asset acquisition or similar
business combination with an entity that has an operating business.
Forward Looking Statements
This press release, and other statements that Endeavor or American
Apparel may make, including statements about the proposed acquisition of
American Apparel, contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act, with respect to Endeavor’s
and American Apparel’s future financial or
business performance, strategies and expectations. Forward-looking
statements are typically identified by words or phrases such as “trend,”
“potential,” “opportunity,”
“believe,” “comfortable,”
“expect,” “anticipate,”
“current,” “intention,”
“estimate,” “position,”
“assume,” “outlook,”
“continue,” “remain,”
“maintain,” “sustain,”
“seek,” “achieve,”
and similar expressions, or future or conditional verbs such as “will,”
“would,” “should,”
“could,” “may”
and similar expressions.
Endeavor cautions that forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time.
Forward-looking statements speak only as of the date they are made, and
Endeavor assumes no duty to and does not undertake to update
forward-looking statements. Actual results could differ materially from
those anticipated in forward-looking statements and future results could
differ materially from historical performance.
In addition to factors previously disclosed in Endeavor’s
filings with the SEC and those identified elsewhere in this press
release, the following factors, among others, could cause actual results
to differ materially from forward-looking statements or historical
performance, including factors arising after consummation of the
acquisition of American Apparel: (i) inability to continue to increase
same store sales, (ii) failure to open and operate additional retail
stores in desirable locations on a cost-efficient basis (iii) inability
to anticipate and respond to consumer fashion trends and demand as they
arise, (iv) increases in prices of the raw materials used in the
manufacture of apparel goods, (v) failure to maintain satisfactory labor
relations, (vi) inability to creatively and effectively promote the
American Apparel brand, (vii) failure to hire and retain talented
personnel and (viii) inability to effectively manage and replace as
needed credit lines and other sources of financing.